China tightens stranglehold on rare earth

[Still Waters]

China is to further tighten its stranglehold on the mining of rare earth metals essential for the manufacture of high-tech products from iPods to wind turbines and military missiles.

Mining rights for the 17 rare earth elements will now be restricted to only a handful of Chinese state-controlled mining companies, according to a draft proposal submitted this week for approval to China’s State Council, or cabinet.

The move comes just six months after China - which produces 95pc of the world’s rare earth metals - capped production levels for 2010 and imposed a moratorium on all new mining licenses until June 30, 2011.

The increased restrictions, reported by the state-run Xinhua news agency, are likely to deepen international concerns that China is unfairly hoarding its reserves of rare earth metals and other key raw materials at a time of rising global demand.

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